EFG Hit Hard By Marble Bar, Fund Of Funds Write-Offs

Jul 28 2010 | 12:12pm ET

Swiss private bank EFG International suffered a big loss in the first half—almost all of it traceable to a pair of disastrous investments in hedge fund firms.

The Zurich-based firm wrote-down the values of three asset managers it bought between 2005 and 2008. Most of the 859.5 million Swiss franc write-off is attributable to its stake in hedge fund Marble Bar Asset Management. EFG bought a majority share of the London-based firm in 2007, only to see its assets under management plummet from US$6 billion to less than US$1 billion.

EFG sold its interest in Marble Bar to its management team last month for US$517 million, leading to a 500 million franc write off.

The private bank also wrote off 210 million for fund of hedge funds firm C.M. Advisors, and another 168 million francs for Swedish structured products firm Derivatives Structured Asset Management. All told, the write-offs actually exceed EFG’s first-half loss of 809.8 million francs.

“Client appetite for the products in these three product areas shriveled,” CEO Lawrence Howell said. “We don’t think the world is going to end in hellfire, brimstone and damnation, but it’s very difficult to forecast strong growth in those businesses.”

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...